Landbank to acquire Postalbank at no cost

State-owned Land Bank of the Philippines will acquire the Philippine Postal Savings Bank (Postalbank) at zero cost but with plans to covert the government thrift bank into a major player in the international money transfer business.

On the sidelines of the bank’s Gawad Punla awarding ceremony late Friday, Alex V. Buenaventura, Landbank president and chief executive, said that the board, chaired by Finance Secretary Carlos G. Dominguez, approved the acquisition of Postalbank at “zero value.”

Buenaventura explained the zero price-tag came after PostalBank was valued at a negative

to million. “The proposal is for Landbank to acquire Postalbank, but it was valued at a negative and of course they cannot afford to pay us,” Buenaventura told reporters. “The term we used was ‘zero value,’ meaning we will acquire the bank at no cost.”

Because of the negative valuation, Buenaventura said that Landbank may require to infuse capital into Postalbank.

“Accounting wise we will be booking a premium to cover the negative amount. We will have to infuse maybe a billion pesos to capitalize it,” the Landbank chief said.

Currently, the deal between the two government banks is undergoing scrutiny from the Governance Commission for Government-Owned or -Controlled Corporations (GCG).

After GCG, the buyout will have to be approved by the Bangko Sentral ng Pilipinas’ Monetary Board and President Rodrigo R. Duterte.

Buenaventura, meanwhile, admitted there were some delays in the acquisition procedures, noting the original target of September will have to be deferred to January next year.

“I was the one who made the timetable but I learned that government process takes longer than the private sector. I thought we can do it in six months, but we cannot,” he pointed out.

Once completed, Buenaventura said Postalbank will be renamed as Overseas Filipino Bank, a remittance marketing arm of Landbank, which will operate in countries with high concentration of Filipino workers and migrants.